How Chinese Judges Deal with Ambiguity in Corporate Law: Suggestions for Improving the Chinese Case Precedent System

This paper examines how Chinese judges struggle with ambiguity in legal statutes. I contrast the typical tools used by common law judges to resolve ambiguity with equivalent methods used by Chinese courts, noting that both interpretive systems have serious limitations, leading to unfairness in some cases. I then demonstrate the defects of the current Chinese approach by critically reviewing a series of Chinese court judgments on the shareholder’s right to seek information in the PRC Company Law. Despite the recently implemented Guiding Cases system, Chinese courts still regularly produce inconsistent interpretations of the same legal provisions, leading to unpredictable and unsatisfactory outcomes for litigants. To solve this problem, in the third part, I propose delegating publication of persuasive Guiding Cases to the level of regional High Courts, with the Supreme People’s Court only stepping in to resolve intra-regional inconsistency. I also recommend clarifying the rules for using online judgments drawn from the China Judgments Network as a supplement to the Guiding Cases. This modification would make the Guiding Case system much more responsive to interpretive gaps in the law, and it would assist individual judges struggling to resolve difficult legal disputes